Restoration Of A BVI Company That Has Been Dissolved Or Struck Off

• Published date: 04 July 2022
• Subject Matter: Corporate/Commercial Law, Corporate and Company Law
• Law Firm: AGP Law Firm | A.G. Paphitis & Co. LLC
• Author: Ms Margarita Sofokleous

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

...The application to restore a dissolved company must be made within ten years of the date on which the company was administratively dissolved.

A problem that commonly arises in the company world is the need to find potential solutions or act either against or by, a BVI company that has been struck off or dissolved.

Strike off means that the company's name has been struck off the register of companies because any annual fees have not been paid on time.

Dissolution brings the company's legal personality to an end and assigns its property in third-party liquidators or the Government. Dissolution can take place either because of the company being struck off or after its liquidation.

BVI companies that are struck off but not yet dissolved

In the BVI, when a company is struck off, it is not yet deemed to be dissolved. Instead, it remains in existence, although it is not in good standing and subject to several legal restrictions, for a period of seven years. Only after seven years of being struck off will the company be dissolved. This is significant as it means that during the first seven years of being struck off, the company continues to exist, owns its property and is capable of being sued.

This is clarified in Section 215 of the BVI Business Companies Act which explains that:

• A company that has been struck off may not make or defend legal proceedings; but
• Striking off does not stop a creditor from 'creating a claim against the company and pursuing the claim through to judgement or execution'.

Given that a struck off company continues to have legal status, there are several practical problems which may still occur. Such concerns include:

• the company being able to incur additional liabilities (including fees and late payment penalties which would need be to be repaid in order to restore the company);
• the company potentially being the subject of a creditor's claim or judgement; and
• the members, directors, officers, and agents of the company remaining responsible for any liabilities that existed before it was struck off.

Restoration of a BVI company after striking off

A creditor or shareholder may, in certain circumstances, apply to restore a struck off company or unwind a dissolution. If such application is successful, the company will be restored to the register of companies and will be deemed...